Google Shakes Up TV Ad Picture With NBC Deal

Google (Nasdaq: GOOG) and NBC Universal have inked a multiyear agreement under which Google will distribute ads through its Google TV Ads service for placement on some NBC cable channels.

Sci Fi, Oxygen, MSNBC, CNBC, Sleuth and Chiller are among the channels covered by the deal , which will go into effect later this year. NBC Universal is expected to add more channels to the lineup at some point.

Introduced last May, Google TV Ads is part of the search giant's ever-evolving strategy to maximize monetization of its larger advertising platform -- in this case, by pushing into traditional media outlets.

Local Audiences

Much like its online counterpart, Google TV Ad Service will use a variety of research and marketing tools to distribute ads to local markets. Last October, Google brought Nielsen into the service to provide data about audience demographics gleaned from its television ratings panels.

Advertisers can log onto the Google AdWords report center to access that information. DISH Network, another partner in Google TV Ads, provides accountability through set-top boxes that report viewing information to advertisers.

As Google learns more about viewer demographics, it can utilize remnants of advertising inventory, scattering it to target receptive eyeballs, Mark Simon, vice president of industry relations for search engine marketing firm Didit, told the E-Commerce Times.

"Of course, they will not be alone, as several other large cable providers are already working on developing their own system to target ads with Canoe Ventures. That being said, I wouldn't bet against Google being able to succeed in this new frontier."

A successfully executed deal with NBC should give Google's TV Ad Service -- which so far has cut only limited inroads into traditional media -- a big boost, Brian Sheehan, associate professor at Syracuse University, told the E-Commerce Times.

"It is an important piece in Google's overall strategy," he said.

"Google understands that search is controlling more and more of the consumer relationship. As more content proliferates in various formats and channels, consumers are increasingly relying on search to pick through it all," Sheehan explained. "The search provider that can deliver advertising -- not just online but across all formats -- will be in the best market position. That is why it is important that Google build up its TV Ad service."

Ad Marketplace

Besides providing a boost to its still nascent TV Ad platform, the NBC agreement brings Google closer to realizing a larger goal: becoming a one-stop marketplace for ad placement, Sergio Alvarez, COO of Ai Media Group, told the E-Commerce Times. "The whole idea is to make it easier for people to place ads -- not only online, but on other media channels, like cable, too."

This concept represents a radical shakeup of current practices, but there are benefits to the participants, Alvarez continued. Advertisers, for instance, receive more detailed information about their ads' viewing history and performance data. "They are getting business intelligence that the market has never seen before to help them make even smarter purchasing decisions."

By itself, this agreement is not going to transform the advertising industry, Bob Heyman, chief search officer at Mediasmith, told the E-Commerce Times.

Still, "it is indicative of Google's strategy to be the world's advertising marketplace," he agreed, adding that once that ambitious goal is realized, the current practices of placing and selling ads will have to be reevaluated, for better or worse.

"I remember being told years ago that TV ad salespeople would always have jobs, because in this media ads are sold -- not bought," Heyman said, "but that is proving to be untrue. Advertisers need a marketplace, but they don't necessarily need salespeople anymore, thanks to Google."

There is little question that Google's experiments to extend its distribution are shaking up many business models, Sheehan said.

For an illustration of that point, all one has to do is look at the proposed Google-Yahoo ad partnership, he said. "In the long run, Yahoo (Nasdaq: YHOO) needs revenue to compete with other search providers, so what does it do? It signs an agreement with its biggest competitor to get that revenue."